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Articles From Lumsden McCormick

Is EEOC Enforcement Reform Coming?

Although the Equal Opportunity Employment Commission (EEOC) is intended to be nonpartisan, run by a five-member Commission, a president can appoint a new chairman and vice-chairman when their terms expire. Currently, both of those positions are held by appointees of President Donald Trump. The current chairman's term expires in July 2022. 

According to the EEOC, its chairman is “responsible for the administration and implementation of policy for and the financial management and organizational development of the Commission.” The chairman also appoints the EEOC's general counsel, whose job is to “provide direction, coordination, and supervision to the EEOC's litigation program.”

Conciliation Process Reform

One important impending change in the EEOC's litigation program under the Trump Administration that could remain intact after an administration change is new rules intended to make the “conciliation” process more user-friendly for employers.

Before taking employers to court for alleged employment discrimination, the EEOC is supposed to work things out through conciliation. However, accused employers typically don't bother with that process. Why? Because they haven't found it productive due to lack of transparency on the EEOC's part. Among other things, the newly proposed regulations would require the EEOC, during the conciliation process, to give employers:

  • A summary of the facts and non-privileged information that the Commission relied on in its reasonable cause finding, and, where appropriate, the criteria that will be used to identify victims from the pool of potential class members;
  • A summary of the Commission's legal basis for finding reasonable cause, including an explanation as to how the law was applied to the facts, and the non-privileged information it obtained during the course of its investigation that raised doubt that employment discrimination had occurred;
  • The basis for any relief sought, including the calculations underlying the initial conciliation proposal; and
  • Identification of a systemic, class, or pattern, or practice designation.

Meanwhile, most common categories of litigation brought by the EEOC in its fiscal 2020 period mirrored patterns from previous years, with 60% based on alleged gender, religion, race, and national origin discrimination claims under Title VII of the Civil Rights Act. Within that grouping, sex discrimination was the most common.

Another 30% were filed under the Americans With Disabilities Act, with the remainder filed under the laws banning discrimination based on age, pregnancy, and pay.

Illustrative Employment Practice Cases

Here are a few cases resolved in 2020 highlighted by the EEOC within key “employment practices” discrimination categories:

Gender/transgender discrimination: A Detroit-based funeral home agreed to a $250,000 settlement in a discrimination case involving the termination of an employee “because she announced she was transitioning from male to female.” Upon resolving the case, originally brought in 2014, the EEOC stated that “the law is now clear that discrimination against an employee because of his or her transgender status is sex discrimination.”

Compensation disparity: A national life insurance company agreed to a $20.5 million settlement in a case involving, among other issues, inferior compensation to nearly two dozen female and Black employees.

Terms and conditions: The Veterans Health Administration was found guilty of changing its criteria for promotion in order to promote one candidate who had not met the original criteria, in lieu of a Black candidate who had met the original criteria. The agency was ordered to promote the employee and award her backpay for the pay differential dating back to the time she should have received the promotion.

Class hiring discrimination: A Texas-based manufacturing company paid $225,000 to resolve a charge that it discriminated against non-Hispanics “who were not hired or even considered for employment because of their race and/or national origin.” The company was also faulted for engaging “almost exclusively in word-of-mouth recruiting” in violation of the Civil Rights Act. That recruitment strategy “had an adverse impact on non-Hispanic job seekers.”

Hostile work environment: A Baltimore area concrete contractor agreed to pay $74,000 in restitution to two Black employees — one female, the other male — who had been subjected to abusive behavior by coworkers and were fired after they complained about the abusive treatment they had received.

Customer preference: A Delaware-based owner of methadone clinics paid $110,000 in a settlement involving racial discrimination not only by subjecting Black employees to a hostile work environment, but by accommodating White clients' desire “not to be assigned to Black counselors.”

Same Race Discrimination

Another category of EEOC race-based discrimination cases that arose before 2020 is also worth noting: “same race discrimination.” One such case involving a Texas-based van shuttle company owned by a pair of immigrants from Africa, was resolved in 2007. The proven allegation was that the company “discriminated against African American drivers in favor of native African drivers by denying them more favorable routes.” The company paid $37,197 in penalties.

Final Thoughts

Business owners unaware that the kind of discrimination pursued by the EEOC is occurring within their walls cannot defend themselves by claiming ignorance. A proactive approach to avoiding such litigation by being on the lookout for discriminatory behavior is the best way to go, along with proper training of supervisors and rank-and-file employees.

Is EEOC Enforcement Reform Coming?

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Tom joined Lumsden McCormick in 1999 with experience from a nationally based commercial business. In his role as principal, he has extensive experience in the planning and performance of auditing and accounting services for commercial businesses, nonprofit organizations, and governmental units. Tom specializes in employee benefit plans for a variety of organizations, and coordinates the Firm’s affiliation with the AICPA's Employee Benefit Plan Audit Quality Center. In addition, he has performed dozens of Service Organization Control (SOC) examinations.

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